Prepayment VAT Accounting Procedure

Hi,Please note we use UK VAT for our UK payables. For Prepayment we calculate VAT and as per requirements we also calculate VAT for Standard Invoice before applying them to respective prepayments. This way the recoverable tax amount gets reversed in the same period. Below is the accounting done for this scenario;

 

Create Prepayment Invoice:

Dr Prepayment Expenses

Dr Recoverable Tax

Cr Liability

 

Pay Prepayment Invoice:

Dr Liability

Cr Bank

 

Standard Invoice:

Dr Charge

Dr Recoverable Tax

Cr Liability

 

Prepayment Application:

Dr. Liability

Cr. Prepayment Expenses

Cr. Recoverable Tax

 

We apply VAT both at the time of Prepayment Invoice and Standard Invoice to avoid duplicate VAT accounting. Is this a correct procedure to calculate VAT for sucha scenario. If now would need your help to provide me a better process. Please advise.